Are Real Estate Prices Starting to Fall due to the Crisis?

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2020년 3월 말 기준 미국 주요 지역 주택 중간가격은 전년 대비 상승했으나, 3월 후반부로 갈수록 일부 지역에서 둔화 조짐이 보임. 금리 하락이 주택가격을 떠받치고 있으며, 단기임대·에어비앤비 수익 악화와 임대가 하락이 나타나고 있음. 대출 조건 강화 및 신용한도 동결 움직임이 있으나, 강제 매각(차압) 위기는 모라토리엄·포벼런스로 제한되어 대규모 주택 폭락 가능성은 낮다고 봄.

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01. hey everyone's happy here so most of you know that I'm a real estate broker and a real estate investor so real estate is not only my primary source of income but it's also my primary investment and it's also what I teach you on this channel and my course is linked below I live and breathe real estate so in this video I'm gonna talk about the impact that the crisis has had on real estate thus far that is we're gonna look all the way up through March 27th it took me a couple days to put together the data so that's why we're talking about it here on the 29th but beyond just showing you the data of what's been going on with prices and days on the market and the statistics so far I want to talk to you about deals to look for what I expect to come what I see happening already what about air B&B what about rentals what about mortgages what what's happening like our mortgages freezing up or credit lines getting pulled there's a lot of crazy stuff happening and we're gonna go through all of them I'm gonna finish this off by talking about whether or not I think there's going to be a foreclosure crisis coming to real estate so let's let's get right into this one now the easiest way to understand sales prices is just by looking at what happened in March of 2019 and what things are selling for in March of 2020 right now and so we're gonna start with that and then we're gonna see if we see an impact with the actual outbreak by the way just a heads up sorry if I seem really hyper in this video I was really excited by the data and there's a lot of good information in this or maybe I was just really excited because I got my two free stocks with weevil using the link below for depositing a hundred dollars in the county of Ventura from March 2019 to March 2020 real estate prices went up three point five one percent but remember that does mean prices could have gone down between February and March this is just to show you that the trend was positive that prices were going up also less properties sold year-over-year and properties sold 23% faster in Ventura County the same thing happened in Orange County except slightly more property sold and their prices went up over 8% and sold almost twice as fast year-over-year so the market was really blowing up in Orange County and we saw a similar thing happen in Los Angeles where prices went up 7% in year property's also sold about twice as fast and we saw a substantially fewer sales in Los Angeles which could sort of contribute to property selling for more money this is really really good year-over-year data this means from the beginning of 2019 to the beginning of 2020 real estate has been doing really well for people and this is just straight up median sales prices this is not considering like leverage or loads or anything this is just straight-up appreciation now I'm not trying to be mean by doing this I'm a stock market investor as well but year over year from March 2019 to March today the Dow is down sixteen point five five percent so we can definitely see that so far there's a substantially different cycle between stocks and real estate real estate is up substantially year-over-year but as they say the devil is in the details so even though the year-over-year data was really good we want to zoom in to see what's actually happening between February and March and also within March itself so that's what we're gonna do now just a heads up nobody else is processing this data yet so you're hearing it here first mostly because most companies wait until like April 15th to tell you what the March data is because they wait for the month of March to end and then it takes them like 15 days to put the data together and report it I like to give you the information as it's happening so we can do information make decisions fast the extra three days in the month are can make a difference all right folks this is absolutely insane look at this from February 2020 the start of the crisis to March 2020 then Tura up 2% in price almost 3% Orange County up 1.2 percent LA up almost 5% la made almost 5 a percent in property value from Feb 20 22 March 20 20 whole e smokes what during the crisis up almost 5% with more properties sold and way fewer days on the market to get these properties sold that's insane Hennepin County up three point five nine percent between feb 20 from Feb 20 22 March with days on the market down 30% almost and still more property selling and flying off the shelf absolutely incredible Broward County Florida up 5.5 percent month-over-month with days on the market down as well and slightly more sales Palm Beach region up 3.4 5% Tampa Region up 2.8 8% whoa oh my gosh I have to say like I was absolutely shocked I was legitimately expecting sales to go down from Feb 2 March so you're over your data is peachy Feb 2 March data in 2020 is peachy but what if we actually zoom in to the end of March what starts happening now the trend is not all good news for example if i zoom in and look at the entire period of March 2 just the last 2 weeks of March we start seeing a little bit more shakiness Ventura prices were matched Orange County prices matched la saw a slight decline Hennepin County went up a good chunk over that two-week a change period there Orlando saw a little bit of a decline Broward a tiny bit of a decline Palm Beach went up and Tampa stayed resilient so we could see that when we look month over month things are great when we zoom in we're starting to see a little bit of that shaking has happened at the end but certainly not the kind of shakiness that originally you would expect now there are a few reasons for this a number one prices might still be stable in March because a lot of people may have gone into escrow at the beginning middle or end of February and those people might sort of be like I'm already in a deal I already paid the price so these prices may not be a hundred percent reflective over what's really happening at the end of March even though the deals are closing at the end of March that might be why we're seeing a little bit of that shakiness towards the end because maybe deals are starting to cancel in fact if you read the LA Times you'll see a dead deals a slashed prices the issue drags down Southern California home sales deals are now falling out of escrow sellers are cutting prices and certain types of financing are drying up some mortgage brokers are saying everyone's backing out but the problem with this article is right here where they say for now the evidence is largely anecdotal and that does make sense this is exactly why I like to focus at the data because just because of real estate agents having a bad week doesn't mean another real estate agent isn't having the week of their life so the data helps us get through kind of all of that noise so I'm gonna be updating this spreadsheet again the link is for course members and I'll be updating that I'll probably do another YouTube video on this in the future as well but now we have some really important things to talk about the trajectory of prices rental prices and Airbnb and my expectations let's hit that right now all right so real estate prices are going to be affected in magnitude by how long this issue lasts basically if this issue comes to an end within the next two to four weeks real estate prices are going to stay strong real estate prices probably won't see a dramatic impact mostly because the Federal Reserve lowered interest rates substantially at a fair discount window which that kind of uncertainty led the Treasury bond market to plummet and basically bottom line mortgage rates plummeted substantially at the start of this crisis that actually led to a massive surge in people applying for loans unfortunately because so many people applied for loans lenders are now also being a little bit more choosy with whom they want to give financing to and REITs have kind of temporarily gone up but I also expect rates to kind of settle low once lenders catch up with demand mortgage interest rates are really important when it comes to real estate because of the rule of 10x for every 1/2 percent reduction in rate like if you go to the bank and go y'all what are your mortgage rates and they're like yo four and a half percent right now you know what I thought they were under 4% nope we're too busy right now we'll give you a four and a half you're like no thank you and you call back a week later and they're like yep we could give you a four percent right now or three and a half percent that's great every half percent reduction generally leads to a 10x response in prices so if mortgage rates go down half of a percent you usually see prices move up 5% that might be what we actually saw happen in Los Angeles that quick 5% movement I mean all these prices responded very very quickly as people were locking their rates and solidifying deals with these lower rates that's good for the real estate market that also means the opposite could also happen if rates go up but I don't see rates going up anytime soon with the exception of this sort of like clearing out the demand pipeline that's like way full right now now just one more example if rates went from let's say four and a half percent down to three and a half percent that's an entire 1% drop in mortgage rates that means you could expect to see a 10 percent fluctuation in real estate prices this is mostly because when buyers look at buying real estate they look at what they could either rent the property out for or what their payments would be and then align that to what they could rent the property out for because buyers are so payment focused and payment driven as your payment's get lower your willingness to pay more goes up kinda basic but hopefully the rule of 10x kind of helps you see that a bit so what about expectations going forward we've already got rates clear we think rates are going to stay low they're gonna come back down especially once this demand kind of dries up from this temporary increase we've seen but what about other factors so a big issue that we're seeing right now is a lot of people who have short-term rentals are losing their pants in fact I ended up contacting a course member who does a lot of Airbnb work and makes a substantial amount of income from Airbnb he does an amazing job and here's a screenshot of his bookings they're not looking too good they've fallen off a cliff unfortunately this is screwing a lot of short-term real estate hosts especially real estate hosts who have either a large mortgage or worse they don't even own the property they have to pay rent on somebody else's property because they're doing something known as rent to rent where you sign a lease with somebody for say $2,500 to rent their Hou and then you turn it into an air B&B and you try to rent it out for say four thousand or five thousand dollars a month via Airbnb and you try to pocket the difference after your expenses well the problem is if you have to pay twenty five hundred dollars a month and you're trying to pocket five grand that's all fine and dandy if people are using Airbnb but if Airbnb sales go to zero you're screwed so you have two options you can sell the property which a lot more people selling means prices are gonna come down but you can only sell it if you own it and even most people who currently own aren't thinking of just selling their Airbnb s instead what most of them are doing is they're flooding the rental market during this crisis where people can't even really go outside right now as a result rental prices have gotten slammed rents across the country and this is anecdotal and it be clear here I have not run data on this yet I'm just seeing this happen because I'm getting ready over the next two months to put for rentals on the market this sucks for me they're just my own properties this is over two and a half million dollars of real estate that I'm putting up for rent because they're all under renovation one of the tenants is vacating and three of them are under renovation and this sucks is like the worst timing ever for me and I'm already tracking rent prices and I'm seeing and kind of watching as people are undercutting each other to get their properties rented this is going to make it very very crucial that I continue to use my 360 degree tour technology to give virtual tours of these properties and get these things rented virtually probably gonna have to undercut the prices on these to get these things moving fast speed is extremely important right now I'll be releasing some more lectures by the way from my do-it-yourself property managers and for the rental renovation section on how to get these properties rented ASAP and some tricks to use beyond just 360 tours and pricing and remember if you're not yet a member of these programs where you could join me live five times per week to get market updates like this every day and fast make sure to use the link down below and use that coupon code it's a really good coupon code it's gonna get you in and if want to bundle up because you love what you see you could always email me afterwards and I'll send you a bundle coupon at Kevin and meet Kevin calm so we've looked at the pricing data we've got some Kevin insight into what's happening with rentals and how to deal with it we know what's going on with Airbnb but what about the trajectory of the type of properties hitting the market in the future are we gonna see more fixers hitting the market and is this going to crash the market the answer is potentially see during a period of time like this most home sellers like regular home sellers are like oh I want to move to a bigger house or I want to downsize or you know what I just want to move to Nevada and stop paying California state income taxes and I want to get out of here most of these sort of discretionary sellers are choosing to delay their sales these discretionary sellers are usually the kind of people that go in and over improve their properties oh I got a $70,000 maple kitchen and I've got that Brazilian hardwood floor along with that Italian marble in the bathrooms Wow most upgraded property this is gonna sell for top dollar and I will not hire a real estate agent unless they tell me I can get top dollar for my property because it's the best yeah those people are not selling right now because they're like I ain't having sick people come into my house uh-uh I'll just wait until this is all over and then I'll sell which it's possible that this is going to create sort of three to four months of pent-up seller supply and I could see a lot of people start kind of flooding these deals on the market later fortunately these renovated deals tend to sell for more which is a good thing that's kind of like the principle of getting a wedge deal or a wedge over improved deal but what kind of sales are going to continue to sell during this time well fixers properties that have to sell properties that are hitting the market where people are going fix and flip bring your hammer or I'ma you know bring your contractor or whatever handyman special like these are the kind of deals that are hitting the market right now and they're hitting the market at a higher ratio than those remodel deals because fixers have to keep selling if somebody died the properties have to sell they're not gonna leave them vacant they're gonna put them up on the market California just called all real estate agents and essential service I believe that also applies nationwide because I think there was something that the Fed issued about that but check your state's realtor Association I believe real estate agents are now considered essential which to me sounds like a whole lot of lobbying by the National Association of Realtors which in case you did not know the National Association of Realtors is like the fifth most powerful lobby in the country they're like up there with the NRA it's nuts no wonder they can run all those TV commercials about getting a real realtor now let's talk about mortgages pretty much everybody getting a non-conventional type of loan has a big risk or they are getting spanked right now like people getting jumbo loans like loans that are bigger than the ordinary loan size in your area like way above the median home price a lot of these people are getting spanked they cannot get their loans they're getting their loans frozen or just completely a shut a down I'm actually starting to hear that credit aligned companies are starting to freeze credit lines so if you have a home equity line of credit draw that thing you know you're gonna be paying interest on the money when you draw it but at least you have it that's what I did they did it in 2008 they're doing it now so I drew all of my credit lines just so I have the cash sitting around in a little safe spot so that way if they freeze my credit line I already got the money they can't take it back once you draw it but if you haven't drawn it they could freeze your credit line this stuff is happening so jumbo borrowers are getting screwed non-qm borrowers getting screwed credit lines in some cases are getting screwed right now and another big thing that's happening is FHA borrowers are having the requirements to get an FHA loan jacked up through the roof you used to be able to get an FHA like three and a half percent down loan with like a 580 credit score like you could not rent from me but you could like qualify to buy a house just like insane well anyway those credit scores are going from like 580 to like 640 and 660 to be able to buy a house now so they're really starting to tighten the wrenches on all these different forms of financing with the exception of the one that just keeps staying strong right now conventional financing this is where you can put three five five 10 15 20 % down on a house you're within normal sort of loan limits like you're not trying to unbale like a big fancy new house or you're getting a rental property like you're buying a wedge deal with 20 or 25% down these loans are still doing okay I'm not seeing these freeze up I'm not seeing them have any issues and I personally think that's because the Federal Reserve has backstopped basically supported Fannie Mae Freddie Mac so those loans are fortunately still happening without almost any fail rate which is good all right now the big one are we going to see a massive foreclosure crisis like what we saw in 2008 and our prices substantially going to plummet as a result of that I personally believe the answer to that is no here's exactly why number one forbearance right now it's not the people getting screwed because they had bad loans like ninja loans you know no income no job no assets the crappy adjustable rate mortgage loans with balloon payments most people today who are getting financing you're getting really safe 30-year mortgages and they're only having issues with paying maybe a month or two months of their payments right now because of this outbreak but Congress has already said that nobody can be foreclosed on because of not making payments during this time that people have to be given the opportunity for forbearance this is really good Vic shion's are also banned so everything's pretty much frozen right now which is totally different from what happened in 2008 where you didn't pay it was short sale foreclosure but even in good times we see 2 to 3 percent of listings are foreclosures but ironically because of this crisis going down most foreclosure proceedings are frozen which actually means we should expect to see fewer foreclosures and fewer short sales even though a lot more people don't have work right now aren't making their payments it's like this crazy irony but no I don't think there will be a foreclosure crisis which is crazy to think about so what does that leave me doing well ever since I the video which for some reason YouTube shadow band maybe the information was too good I honestly think it was because the original title I had was did we just hit bottom my $42,000 bet because I said bet and so now it doesn't appear in the search results it's like seriously YouTube like come on but anyway in that video I said I'm officially out there looking for wedge deals again I made my reasons in that video but I am not passing up on good deals that are hitting the market now so if you see a good deal chase it follow the advice in the real estate investing course renovate it like I suggest in my property management and do-it-yourself rental renovations course if you don't yet have the money to do that join the sales course join the psychology of money course get money knowledge so that you can actually use this time and do something productive and make money once this sort of stay at home period is over thanks so much everybody for watching I hope you appreciated this update and until next time